Statement of Administration Policy: H.R. 2282 - National Science Foundation (NSF) Authorization Amendments Act of 1991

(House)
(Boucher (D) Virginia and 17 others)

The Administration strongly opposes H.R. 2282. The bill is unnecessary because current law already authorizes sufficient NSF appropriations through FY 1993. In addition, the bill contains numerous objectionable provisions.

The Administration strongly opposes Section 3, relating to administrative indirect cost reimbursement. Legislation is unnecessary at this time in that identified abuses are being stopped administratively. It is also premature in that, until cost accounting standards are set, remedies could curtail appropriate reimbursements while stimulating the creation of additional loopholes. Not enough is currently known about the specific accounting practices of particular universities to craft a legislative remedy that would curb abuses and yet not damage the research enterprise.

The Administration has published for comment revisions to OMB Circular A-21 (Cost Principles for Educational Institutions) which would: (i) clearly rule out reimbursement for a wide variety of abuses not clearly prohibited by the current Circular; (ii) cap at 26 percent the rates of reimbursement of university administration indirect costs; (iii) ensure that reimbursement of indirect costs for buildings and equipment is used for buildings and equipment directly associated with Federally sponsored research; and (iv) require universities to ensure that the Federal Government does not in any way subsidize indirect costs associated with research supported by industry or foreign governments. OMB has, in addition, established a Task Force to review the overall Circular A-21 mechanism and develop cost accounting standards for Federal research grants and contracts. Legislative remedies should await the conclusion of this effort.

Section 4, the "Buy America" section, could impair the President's authority to decide what actions the United States should take against countries identified pursuant to Title VII of the Trade and Competitiveness Act of 1988. This would limit the ability of the United States to use Title VII as leverage. This provision would also invite foreign governments to close their procurement markets to American firms.

The Administration also opposes provisions in Section 2 that would: (1) divert authorized funding from research and instrumentation to lower priority programs and (2) prohibit the construction of the Laser Interferometer Gravitational Wave Observatory.